technical analysis of BTCUSD

Technical analysis of BTCUSD

Bitcoin has moved up again so far this week after the Fed’s reiteration of continuing QE supporting the economy and general positivity in crypto markets. This technical analysis of BTCUSD looks at the daily chart plus price versus deliverable volume and three-month futures on bitcoin.

High resistance here is the latest all-time high around $58,300. Low support might occur around $30,000, the area of the penultimate retracement on this chart and an important psychological area.

Technical indicators on BTCUSD D1

 

Moving averages continue to give a very strong buy signal, with all of the 50, 100 and 200 SMAs successively above slower lines and below the price. There was no attempt to test the 50 SMA from Bands last week or over the weekend: this is the main short-term support from moving averages, while the value area between it and the 100 SMA is likely to be in view if there’s another, deeper retracement over the next few days.

Price has moved very clearly out of overbought over the last fortnight based on both Bollinger Bands (50, 0, 2) and the slow stochastic (15, 5, 5). The latter at about 26 is significantly closer to oversold than neutral. So far, though, there is no clear indication of significantly higher buying volume of the CFD.

Price action and Fibonacci

 

The fundamental uptrend is still clearly in evidence and liquidity-based drops seem to be shrinking based on the latest retracement. Yesterday’s upward engulfing candle would typically be taken as a strong buy signal in the context of reaching short-term support in a strong uptrend and moving out of overbought. The descending triangle on the four-hour chart (H4) can probably be disregarded for now, but any interaction with the psychological area of $50,000 is very important over the next few days for determining whether the uptrend will clearly resume or a deeper retracement might be more favourable.

The 23.6% weekly Fibonacci retracement area is front and centre as a short-term support for now, with price retreating upward quite strongly from this area on Sunday. Some traders might favour the establishment of a channel between this zone around $44,000 and the psychological area of $50,000, but sentiment and to a lesser extent fundamentals make selling in here risky.

Bitcoin’s price and volume

 

technical analysis BTCUSD

The 30-day chart of bitcoin’s price against volume (all exchanges) shows us a pretty normal situation during a strong uptrend. Traders and investors seem to be both buying the dips and buying strength. 23 February’s $6.8 billion in daily volume is among the highest ever recorded. However, the usual caveat that traders of CFDs should typically consider entry more carefully than investors in transferable cryptocurrency still applies here: many of the former might prefer to wait for a deeper retracement.

Futures on bitcoin

 

BAKKT® futures display a pretty similar picture to the spot CFD although here the drop for March’s contract over the last couple of weeks is less pronounced. Three-month volume is not especially high: about 400 total was fairly common for a single month for much of last year. This might suggest that participants are moving away to other markets for the moment, but it also looks probable that many are biding their time to find a more favourable entry to buy. Generally speaking, it’s particularly risky for anybody to hold a position against a strong trend for any length of time.

Technical analysis of BTCUSD: summary

 

Overall TA remains positive for bitcoin and suggests that the main uptrend is likely to continue sooner or later. For many traders, good clues as to when and how deep the current retracement could be might be found from behaviour on lower timeframes around the latest important areas, being $50,000 and the 23.6% Fibo near $44,000.

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